The tide is turning for tech companies, and job security seems to be a fading dream. Just like the staggering numbers show – over 164,000 tech employees laid off in 2022 by more than 1,000 companies, and that number ballooning to over 262,000 in 2023 – the harsh reality has now hit Nigerian proptech startup, Spleet. The company, aiming to be a game-changer in the housing market, is reportedly preparing to let go of some of its workforce due to the economic turmoil gripping Nigeria.
Spleet, which secured $2.6 million in funding just last year from investors like MaC Ventures and HoaQ Fund, offered a glimmer of hope for renters and landlords alike. Their model allowed for flexible rent payment plans for tenants, making housing a bit more accessible, while also assisting landlords with rent collection. However, the economic downturn in Nigeria has thrown a wrench into their well-oiled plans.
Landlords, facing the double whammy of skyrocketing inflation and a devalued currency, are seeking higher returns on their investments, particularly those with properties in Lagos’ prime locations where rents are already astronomical compared to the average monthly income. This rent increase puts a strain on Spleet’s business model. With a potential tenant pool shrinking due to economic anxieties, the company’s revenue stream is under immense pressure.
The dream of a thriving proptech sector in Nigeria, fueled by the likes of Spleet, Fibre, and Muster, seems to be facing a harsh awakening. These startups, with their innovative pay-per-month rent model, envisioned a revolutionized housing market, addressing the significant housing shortage in the country. But the Nigerian real estate market has proven to be a tough nut to crack. Several similar startups have already succumbed to the pressure, with Fibre, a pioneer in the space, being a prime example. They even resorted to tenant evictions in 2021, and their website is now defunct.
Despite the bleak outlook, Spleet’s CEO, Adetola Adesanmi, remains optimistic. He insists that the company is not on the verge of shutting down, but rather undergoing a necessary restructuring to weather the economic storm. Only time will tell if Spleet can navigate these choppy waters and emerge as a leader in Nigeria’s evolving proptech landscape.
Source: Innovation Village